(Bloomberg) The one-year extension of a U.S. tax credit for wind power will save as many as 37,000 jobs in an industry that's expected to stall this year, the American Wind Energy Association said. The impact may not be fully felt until next year.
The production tax credit was due to expire at the end of 2012 and the extension was part of yesterday's passage of the bill to avert the so-called fiscal cliff that would have imposed income tax increases for most U.S. workers. The bill will cover all wind projects that start construction in 2013.
The wind industry lobbied all through 2012 for an extension of the credit. With its fate uncertain, the U.S. installed an estimated 11,800 megawatts of turbines in 2012, falling to 4,800 megawatts this year, according to Bloomberg New Energy Finance. With the extension, development will probably pick up in the second half of the year and may not drive significant growth until next year.
"Though too late for this year, it will allow the U.S. market to see some recovery in 2014," Justin Wu, Hong Kong- based head of wind analysis at New Energy Finance, said by e- mail.
Energy developers were racing to complete work by Dec. 31 to qualify for a tax credit of 2.2 cents a kilowatt-hour for power from wind farms that were complete by the deadline. Manufacturers and installers of wind turbines had sought the revised language in yesterday's bill to allow for the 18 months to 24 months needed to develop new wind farms, according to the Washington-based trade group.
"The down-to-the-wire nature of this extension meant that many developers, rushing to finish their projects before the 2012 year-end deadline, probably had to work through the holidays," Wu said.
The tax credit helped make wind the largest source of new capacity in the U.S. last year, according to New Energy Finance.
"Now we can continue to provide America with more clean, affordable, homegrown energy, and keep growing a new manufacturing sector that's now making nearly 70 percent of our wind turbines in the U.S.," Rob Gramlich, who becomes interim chief executive officer of AWEA today, said in a statement after the House passed the budget bill.
Wind energy has the potential to supply as much as 20 percent of America's electricity by 2030, according to projections from the U.S. Energy Department.